2024 (3) TMI 1334 - AT - Insolvency and Bankruptcy

Seeking for substitution of Resolution Applicant with another entity, which has been rejected by the Adjudicating Authority - Asset Reconstruction Companies - Resolution Applicant or not - HELD THAT - The present Appeal has been filed against the order by which application filed by the Appellant has been rejected and the reasons given by the Adjudicating Authority for rejecting the application filed by the Appellant for substituting another Resolution Applicant in place of the Appellant, fully agreed upon - When plan of the Appellant as Resolution Applicant was approved, the Adjudicating Authority rightly refused to substitute another Resolution Applicant, in which order no infirmity is found. In so far as submission of the Appellant that some way forward has to be looked into. It is always open for the Monitoring Committee as well as the Appellant to make appropriate application before the Adjudicating Authority to find out a way forward and to proceed further and it is for the Adjudicating Authority to take call on said applications and decide the same in accordance with law. Appeal dismissed.

Summary

Issues:
Application for substitution of Resolution Applicant rejected by Adjudicating Authority.

Analysis:
The appeal was filed against the order of the Adjudicating Authority rejecting the application for substituting another entity as the Resolution Applicant. The Resolution Plan of the original Appellant had been approved, but they sought substitution due to concerns regarding their eligibility as per a circular issued by the Reserve Bank of India. The Adjudicating Authority, after considering arguments from both sides, concluded that a new Resolution Applicant cannot be brought in or substituted. The Appellant argued that due to eligibility concerns, they should not be the Resolution Applicant, and the Adjudicating Authority should find a way forward or initiate a fresh process.

The Appellate Tribunal agreed with the Adjudicating Authority's decision to reject the application for substitution. They found no infirmity in the Authority's refusal to allow another Resolution Applicant after approving the original Appellant's plan. The Tribunal highlighted that the Monitoring Committee and the Appellant can still approach the Adjudicating Authority with new applications to find a way forward, leaving it to the Authority to decide on such matters in accordance with the law. Therefore, both appeals were dismissed, with the parties having the liberty to make further applications for consideration.